Motability faces calls to increase grants or cut prices

Disabled activists have told Motability it would be “obscene” not to expand a fund that provides grants to customers with high support needs, after an inquiry heavily criticised the decision to pay the executive running the car scheme £1.7 million.

No other vehicle leasing company can compete with Motability because of the public funding it receives through the mobility allowances of its customers – paid directly from the Department for Work and Pensions – and the £700 million a year it receives in tax exemptions, says the report.

The report also says that the level of reserves held by Motability Operations – at £2.4 billion – is “out of proportion to the risks it faces” and it calls on the company to cut its prices or make “very substantially higher charitable donations”.

It concludes that it is “difficult to square the high levels of executive pay and significant financial reserves at Motability Operations, the company that runs the scheme, with its charitable objectives and the wider context of pressures on welfare expenditure.

“Motability badly needs a new roadmap for how it manages the scheme’s finances.”

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The National Audit Office (NAO) is now set to carry out an inquiry into the way the scheme is run.

The company makes donations every year to Motability*, the charity that oversees its work, and to the Motability Tenth Anniversary Trust, a charity which provides grants to existing and prospective members of the scheme.

Since 2011, the report says, Motability Operations has donated £345 million to Motability and the trust, about a quarter of the £1.4 billion it generated in profits, while its reserves have grown from £1.1 billion to £2.4 billion.

But at a time when Motability Operations has reserves of £2.4 billion and Betts is earning £1.7 million a year in salary, pensions, incentives and bonuses, campaigners are calling on the company to follow the committees’ recommendation and increase its donations.

They point to rules introduced four years ago for Motability’s Specialised Vehicles Fund (SVF), which mean that only disabled people who spend more than 12 hours-a-week in education, work, volunteering or caring can qualify for grants enabling them to lease a drive-from-wheelchair (DFW) vehicle.

Disabled People Against Cuts (DPAC) said it was “obscene” that Motability was refusing to provide such grants to those not meeting the rules when Betts was earning “a whopping 1.7 million pounds a year” and had seen his remuneration package rise by 78 per cent in nine years.

Linda Burnip, co-founder of DPAC, said: “While the Motability scheme itself and especially the Special Vehicles Fund has provided independence and choice for many disabled people it looks very much as if their finances and operational practices need an urgent overhaul.”

Frank Field, chair of the work and pensions committee, said: “It is impossible to calculate the human happiness that has resulted from the freedom and independence that Motability scheme – the first and only scheme of its kind – offers disabled people.

“But the organisation operates as a monopoly that faces no competition in accessing disabled people’s often hard-won PIP benefits.

“The levels of pay pocketed by its executives and the cash reserves it is hoarding are totally out of whack with [the] reality of its position in the market.

“That one member of staff is paid over ten times what the prime minister earns, is one example of where Motability needs to get a grip of itself and realise the privileged position in which it trades.

“Its executives must co-operate with a full NAO investigation into the value it is offering the taxpayers who fund a significant chunk of its operations.”

A Motability spokeswoman said: “We welcome that the report recognises that the scheme ‘provides an extremely valuable service to disabled people’ and one that has helped ‘millions of disabled people… have their lives greatly enhanced’.

“This reflects our priorities of always providing outstanding customer service, value for money, sustainability, and putting disabled people and their families on the road to freedom.”

She said Motability and Motability Operations had both already made clear they would welcome the NAO review and now “look forward to engaging with the NAO”.

But she added: “Given the National Audit Office is to conduct its review, we won’t be making any further comment at this stage but will be more than happy to once the review has been completed.”

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